Strat's Long Term Stress Free Trading

Hey Strat,

Sid,

Why have you honed in on GBPCHF? - what makes it an attractive trade for you? Why this pair over any other pair?

My current overall favourites pairs currently are AUD/USD and USD/YEN and GBP/CHF. I zoomed in on the latter because the others had been discussed before. But apart from that, GBP/CHF has "wound up" for quite a while now which has two benefits: it allows for tight stop/losses and I expect the move to be very strong once it breaks out of the consolidation.
Also, for me the chart shows a certain clarity or aesthetic which stands out.

I'm surprised you can't see the likely direction from your charts. Take a 2 second glance at the BIG BOSS, then the BOSS and then the Worker - what do they tell you?

All three are telling me down. That's why I am suscpicious ;-)

Why have you drawn your trend line from the points you chose?

Trend lines are something I am experimenting with - so far I've found out that chalk and oil colours don't work well on my particular laptop screen and a friend suggested a scratching technique, but he doesn't know anything about trading; so I am back to the digital lines.

Apart from that I currently ask myself "which area along a line does the price tend to react to?" In this specific case I saw biggest correlation along the opening/closing prices of the bars that I have connected - so price tended to pull back to or stop at this line. (At the very beginning there is a slight inaccuracy of my drawing though).
Do you have any feedback on this?

Be sure of one thing my friend....this time you are gonna rinse this baby.....

Welcome aboard!!!!!!

nice.....

Rinse this baby... LOL

I just hope I don't throw the baby out with the bath water, as they say.

Baba, you are one wild and crazy guy.

Nice to meet you.

I've been meaning to post this for ages and then something else comes up so after a PM this week-end, I finally got the memory jog.

Re-visiting the Hammer & Shooting Star Price Reversal Bars;

Bond Hammer & Shooting Star:
Remember Bond? When he got down to the nitty gritty, it wasn't the REAL thing!
So it is with a Bond Hammer and Shooting Star. It may "look like" one but it's NOT.
There are many reasons for this and remember I'm talking a perfect world, which as rookie traders, you need to learn.

Hammer:
The hammer MUST be at the END of a DOWNTREND. It MUST have a long tail that has gone searching below looking for more sellers BUT found a level at which buyers were now prepared to buy at. The Japanese called it a HAMMER because it hammered prices down (nailed it!)

Considerations:
A hammer that will not produce a SWING LOW is more than likely a Bond hammer.
Be very careful of hammers in STRONG TRENDS. Think, the STRONGER the trend, the BIGGER and LONGER the hammer. Hammers fool many people in strong trends.

Look at the Bond hammer on EURUSD on Oct 6, 2008. I remember many people on the threads getting excited over this as it appeared on just everybody's data. Lot's of people took a TICKET TO RIDE (Beatles 1965) on this and burned in hell!
It was a Bond hammer because it "looked" pale and insignificant compared to the bars preceeding it, it had not found support. It just was not "man enough" to STOP a strong trend that had been roaring since mid July.

Now look at the hammer on GBPUSD on Oct 24, 2008. See the difference?
This "looked like" it could STOP the same roaring trend and it did - for a while. It found support AND the level where buyers were prepared to buy again. As I have said many times, after a strong trend and BIG hammer, I expect an IB and, Oct 27, 2008 duly obliged with a Bond hammer. This bar was telling us "I've had another go at selling for you, pal, but, those buyers are giving me a hard time so I'm going to take a bit of a rest".

Now for those that like FIGHTING strong trends and COUNTER TREND TRADING, this IB gave you an opportunity to enter on a discounted price at the high of the IB. You would have to stay on your toes to manage it properly to come away with 600 pips or so.

For an example of PERFECTION in a hammer look at AUDJPY on March 5, 2007. Isn't she beautiful and downright drop dead gorgeous? If only she would meet me every week!

See also CADJPY on Jan 21, 2009 for another beauty.

I purposely haven't put up the charts for these because I want YOU to go to YOUR charts and study this.

Now, while you are dreaming of how much you could have made if you had been in on that trend, LOOK at the 20. SEE how POWERFUL it is. SEE how it HELPS you determine the trend. SEE how it tells you which side YOU should be on. SEE how it provides DYNAMIC RESISTANCE. SEE how it has turned around and is now providing DYNAMIC SUPPORT. Never, ever, under estimate the VALUE and POWER of the 20 (right, Dan?)

Talking about trends, my favourite method of trading, if you are DETERMINED, PATIENT and can PERSEVERE and can demonstrate at least 3 years of consistent equity growth, then you will be qualified to work with me on this money making machine.

Shooting Star:
The shooting star is the opposite price reversal bar to the hammer
The shooting star MUST be at the END of an UPTREND. It MUST have a long wick that has gone searching above looking for more buyers BUT found a level at which sellers were now prepared to sell at. The Japanese called it a SHOOTING STAR because it was SHOOTING for higher prices and got SHOT!

Considerations:
A shooting star that will not produce a SWING HIGH is more than likely a Bond shooting star.
Be very careful of shooting stars in STRONG TRENDS. Think, the STRONGER the trend, the BIGGER and LONGER the shooting star. Shooting stars fool many people in strong trends.

See AUDUSD on July 15, 2008 for an example of a shooting star at the end of a "stair stepping" uptrend - it is not perfect, but good enough. Note how it produces a MAJOR SWING HIGH.

See EURUSD on July 19, 2002 for a shooting star at the end of a strong uptrend.

Conversely, a Bond shooting star in a rally in an already confirmed STRONG DOWNTREND almost always works but always trade with caution - see AUDUSD on September 22, 2008 for an example.

Now, what you are going to notice with shooting stars is that they will almost never look as powerful and strong at the end of a trend as hammers do.

Why? You must never forget we are ALWAYS dealing with ENERGY and The Laws of Physics/Nature. Just like a ball at the top of a hill, it will roll faster down hill, WITH LESS ENERGY, than it will rolling uphill. In fact, it won't roll up hill WITHOUT ENERGY. It takes a lot of energy (BUYING PRESSURE) to roll a ball uphill (uptrend). At the TOP of the hill, The Laws of Gravity are no longer fighting us; they are now on our side and the ball (prices) fall with less energy (SELLING PRESSURE). If you don't know already, prices FALL FASTER than they rise.

It is because of this that we can accept a less than perfect or maybe a Bond shooting star at the end of an uptrend providing it meets all our other conditions. However, you must always trade price reversal bars with caution.

One other point:

Price does not always need a hammer or shooting star type bar to reverse it's trend. There are many other bars and formations which form swings and major swings.

I could write a book on this but that's all for now.

""Baba, you are one wild and crazy guy""

That's a laugh! It's all a front! He is as meek and mild as a lamb in real life plus his trading is ULTRA CONSERVATIVE - don't mention RISK or LOSING to him because he breaks out in a hot sweat and has convulsions.

A bit like Didier Drogba I suppose - the strength of a bull but the pain threshold of a lamb when he is tackled!

For the most part yes, still learning of course but im getting there. i think my biggest problem is patience right now. I have always had problems getting good entries because of a lack of it so that is something i have been working on.

Iam still reading J16, on pg 60 right now. I ordered a couple of the psychology books you recommended earlier in the thread so ill be starting those soon.

[quote=elitejets;2722719]

Here is the lesson of NFP as I see it funnymentally ...
There are people starting to believe that the rally/recovery underway might actually be real and continuing. If that is so then all the money that the US has printed is very inflationary. Hence strong downward pressure on the USD and the strong upward pressure on commodities priced in USD.
While this lasts I am very bullish commodities (especially gold, silver, oil etc) and commodity currencies (CAD, AUD, NZD).
Rising indices are bearish for the yen too.

For everyone,

Nicola is a very smart, sharp and clever lady (not a dumb blonde - although she is blonde and good looking and....single) and is very aware of economic fundamentals and what is happening in the business world outside of trading.

We are encouraging her more and more to do this so that in addition to her prowess in crude, she becomes our fundamental analyst.

Watch out Jacko, she is far more good looking than you AND younger!

Amen brother

""I think my biggest problem is patience right now""

Good lad, Craig. Recognising your problem is half the battle. Recognising a trading psychology problem is even better. Trading psychology accounts for 90% of our success as traders. It is never given the attention it deserves because it is not glamorous nor does it produce pips (yes it does, lots of them - indirectly).

Take a look at TITZ on The Path of Learning in addition to reading your books.

Keep with the programme and stay on The Path of Learning - we have many guys like you with an itchy trigger finger who are now lying in wait for everything to line up before they get their wallet out.

PATIENCE & DISCIPLINE RULE

I see people on every thread wanting to know the latest technique, the best entry method, best exit etc., etc., because they are not making money or worse, LOSING money. The technical skills only account for 10% of whether you will make money or not. I have seen and known many technically brilliant traders who couldn't trade their way out of a paper bag - they fall apart as soon as they are in a trade with THEIR money on the line.

It was happenning to me all the time until I realised and accepted that I needed help with my trading psychology specifically to control my GREED and FEAR emotions.

I now know how to control these but as I posted in my experimental USDCAD trade, if I don't go into a trade FULLY PREPARED (which I didn't) I get hung out to dry by the guy inside my head. Fortunately now, I recognise the signs and just pull the plug immediately which was totally opposite what I used to do.

Before, I used to "freeze" and not do anything except watch my trade go further and further in the red until the pain got so bad that I finally got out. Then what usually happened was that price turned around and went on to make profits in my original direction! (Direction right, Timing wrong)

Oh, those technically brilliant traders that couldn't trade their way out of a paper bag? - they are the ones writing all the books, selling systems and tutoring courses.

So again, those that do, do, and those that can't teach! Be careful Strat, you're teaching on here! Yes, but I do and I do very, very nicely thank you.

[quote=Sid;2723385]Hey Strat,

Sid,

Why have you honed in on GBPCHF? - what makes it an attractive trade for you? Why this pair over any other pair?

My current overall favourites pairs currently are AUD/USD and USD/YEN and GBP/CHF. I zoomed in on the latter because the others had been discussed before. But apart from that, GBP/CHF has "wound up" for quite a while now which has two benefits: it allows for tight stop/losses and I expect the move to be very strong once it breaks out of the consolidation.
Also, for me the chart shows a certain clarity or aesthetic which stands out.

I'm not sure having favourites is a good thing - you should SEE all pairs EQUALLY unless you are wanting to specialise in which case it should be only in one pair much like Jacko does with EURUSD.

I have not been interested in GBPCHF since February as she started meandering sideways in an ascending triangle. I will only renew my interest once she tells us where she's going outside of the triangle.

I'm surprised you can't see the likely direction from your charts. Take a 2 second glance at the BIG BOSS, then the BOSS and then the Worker - what do they tell you?

All three are telling me down. That's why I am suscpicious

Good analysis but why are you suspicious? You have 3 time frames working in your favour. Don't you like trend trading or do you prefer calling tops and bottoms? Have you read Dr. Joe? If not, read it, if yes, read it again because you didn't understand it. He knew more than anyone at the time.

Why have you drawn your trend line from the points you chose?

Trend lines are something I am experimenting with - so far I've found out that chalk and oil colours don't work well on my particular laptop screen and a friend suggested a scratching technique, but he doesn't know anything about trading; so I am back to the digital lines.

Apart from that I currently ask myself "which area along a line does the price tend to react to?" In this specific case I saw biggest correlation along the opening/closing prices of the bars that I have connected - so price tended to pull back to or stop at this line. (At the very beginning there is a slight inaccuracy of my drawing though).
Do you have any feedback on this?

Your description sounds correct so maybe it was the quality of the chart in the downloading process. Anyway, I'll find a better example and show you in another post.

NO! Your TL placement is CRAP - see my next post using YOUR GBPCHF

I'm not sure having favourites is a good thing - you should SEE all pairs EQUALLY unless you are wanting to specialise in which case it should be only in one pair much like Jacko does with EURUSD.

I have not been interested in GBPCHF since February as she started meandering sideways in an ascending triangle. I will only renew my interest once she tells us where she's going outside of the triangle.

by favourites i actually meant that these pairs are currently getting my attention. i love all pairs equally - well, almost all of them anyway.


Good analysis but why are you suspicious? You have 3 time frames working in your favour. Don't you like trend trading or do you prefer calling tops and bottoms? Have you read Dr. Joe? If not, read it, if yes, read it again because you didn't understand it. He knew more than anyone at the time.


possibly too good to be true i thought, remembering kostolany saying that markets behave like a capricious woman. i like trend trading almost as much as catching a top or a bottom (unless it's a nicely shaped female one).

i have read dr. joe - but i'll have a look at it again and see what i might have missed.


Your description sounds correct so maybe it was the quality of the chart in the downloading process. Anyway, I'll find a better example and show you in another post.

fantastico. much appreciated!

Good grief. My non-trading friends are always over-selling me and trying to fix me up but I thought you understood.
I have a significant other. His name is Mr Mark(et) and he is very time consuming. He gets me up at 1:30AM for the London open and sometimes I even dream about him ...

I will always remember the guy who introduced me to the "butt-ring indicator"

i dont do risk or losing......il be at break even before then.......i love break even......if price goes she goes......and that HAS to have at least the boss with the worker to go on and on.And if its so tight i cant get an Even on it im not playing.

This is a consolidation market...act accordingly.....or Die.

If i do have any strength its being able to wait for PERFECT price action....Im wild and crazy about that....and not losing and covering my risk exposure as soon as poss.Im not here to take a chance........in fact of late my butt has been exposed for a max of about 1 hr.........BBBBBBaaaaaaaa

It's a good indicator to be sure

Interesting...I see the CADJPY bar clearly, but on my daily chart for AUDJPY on March 5, 2007 the candle has no tail. It gapped down after the weekend, but there is no tail so I would not see it as a hammer.

you must have felt the engagement then.......it is big voodoo.....bit like the 20 hey Dan...

how you doin?

Looks like a nice tweezer bottom. Check out the index if you are registered on the path for candlestick links.